Friday, September 9, 2016

HOT Fed Official Sees ‘Reasonable Case’ for Rate Hike

The head of the Boston Federal Reserve said on Friday that a “reasonable case” can be made for a rate increase given the growing risk that the US economy and financial markets will overheat.

Eric Rosengren, a voting member of the Fed’s policy-setting board, spoke at the South Shore Chamber of Commerce in Quincy, Massachusetts and said that “despite headwinds from abroad” the US labor market continues to “gradually tighten” while inflation is “slowly returning” to the Fed’s goal of 2 per cent annual growth.

The jobs market may “reach or even exceed full employment over the next year”, Rosengren added.

These comments are significant since Rosengren is a dovish-leaning Fed official.

The Fed's next regularly scheduled FOMC monetary policy meeting is September 20-21.

As I reported earlier this morning, the Fed's very dovish member Lael Brainard has just popped up on the calendar with a speaking engagement on Monday. That's one day before the blackout period before the September FOMC meeting.

Some view Brainard's newly scheduled Monday speech as an indication she will signal that she is comfortable with a September rate hike.